You are welcome and see here for more help. You dont have to reformat first when you use the Recovery disks.

Quote:

The HP Recovery Manager restores the PC to the original licensed operating system. If the operating system was upgraded to Windows Vista from XP, use the recovery discs to restore the PC back to its original XP factory settings. After the PC is restored to its original condition, it can be upgraded to Vista once again.

Well, I bit the bullet and did a clean install of 7 Ultimate. I spent the day reinstalling the important stuff and now I don't have the HP crapware that came with Vista and what I do have, works.
Thanks for your time, help and support.

Had the same problem on my HP with Win7. Worked on different solutions, fixes, repairs just as you did. No luck. Was about to do the recovery, but did not want to reinstall all of my programs etc. Windows Live Mail would not work and that was my main email program. As you learned the early .Net versions cannot be removed and reinstalled and .Net 4 did not help and 3.5 would not run. My system has 2 folders with the .Net files. One in Program and one in Program (x86). I renamed the one in program files and copied the one from (x86) into Program. It worked and my system was usable again. Andy